TipRanks
The 5G Revolution Could Send These 3 Stocks Higher
5G is here. The new networks are online and expanding, and customers – individual users, institutional users, and industrial applications – are beginning to take advantage of the new technology. The benefits of 5G are already well known: faster connections, more efficient upload and download capabilities, lower latency, more security. 5G technology is essential for developing the full potential of autonomous vehicles and IoT projects. How it will affect ordinary life remains to be seen. Some of Wall Street’s leading analysts have been taking the measure of the new network, and its impact on affiliates – and their stocks. Using the TipRanks database, we have compiled the latest data on three such stocks that analysts have tapped for earnings in the growing 5G environment. Capture CommScope (COMM) Let’s start with CommScope, a hardware provider for network infrastructure. The company manufactures antennas for tower construction and installation, base stations, and outdoor wireless system power supplies. As a holding company, these CommScope products are manufactured and marketed by subsidiaries, to customers worldwide. The company last month announced a partnership with Nokia on a passive-active antenna platform, promising faster delivery of 5G to customers. And earlier this month, CommScope announced a contract with the city of Wyandotte, Michigan, for network installation, including 5G, and giving the company access to over 25,000 potential customers. CommScope reported $ 2.17 billion in Q3 revenue, up 3% year-on-year. The Broadband segment showed 20% year-on-year growth, and the free cash flow hit $ 350 million. 5-star JPMorgan analyst Samik Chatterjee elaborates on CommScope’s forward potential: “Our constructive view of CommScope shares is guided by expectations for a better outlook for the Outdoor Wireless Segment that is in a position to benefit from r ramp in 5G intensification efforts for wireless networks, in combination with continued durable spending of cable / broadband networks. ”“ We expect the pace of investments in the wire network to continue, guided by bandwidth requirements to support peak usage, as well as tails emerging from initiatives such as RDOF and satellite recovery. spectrum for 5G, “the analyst added. In line with these comments, Chatterjee rates the stock overweight (ie Buy), and its $ 18 price target suggests a 35% upside in the year to come. (To watch Chatterjee’s history, click here) Chatterjee is broadly in line with the rest of Wall Street, which has assigned COMM slightly more “buy” ratings than “holdings” over the past three months – and see the stock growing about 19% over the next 12 months, to a target price of $ 15.80. (See COMM stock analysis on TipRanks) Crown Castle (CCI) The next stock on our list, Crown Castle, acts as an investment trust real estate, owns and manages cellular network assets, including towers and transmitter locations.The company has over 40,000 towers, 70,000 active small cells, and 80,000 miles of fiberoptic lines The Crown Castle network is part of the shared infrastructure that supports the wireless communications system in the US 5G networks have been good for Crown Castle, and the company has seen growth and expansion. In November, Crown Castle signed an agreement with DISH, which is looking to expand its 5G footprint. The lease agreement gives DISH rental rights on up to 20,000 towers, and includes fiber transportation. Good revenue has been steady between $ 1.4 and $ 1.49 billion throughout the year, with Q3, the most recent, coming at last value. The company saw site rental revenue earn 4% yoy. The introduction of customers to 5G, and the consequent need for additional tower sites, underpins the robust financial results. The solid quarterly results allowed the company to increase its quarterly dividend by 11%. Holders of common shares now receive $ 1.33 per common share, annualizing to $ 5.32 and yielding 3.4%. Dutsche Bank analyst Matthew Niknam sees the DISH deal as part of an overall positive picture for Crown Castle: “CCI is set to become an early beneficiary of multiple new industry catalysts in the coming years, including the construction of 5G DISH and using C-Band spectrum. “” In particular, we believe that its agreement with DISH for up to 20k sites puts it at a prime position to be a tower partner of choice, at least early. Our analysis shows that DISH could easily account for 10% of CCI’s Tower site leasing revenue by 2027E, with the agreement (conservatively) adding $ 15 / share in value for CCI. Second, with ~ 70% of CCI’s sites located in the top 100 markets, we believe its portfolio over indexes to markets most likely to see an initial C-Band build, “added the analyst. To this end, Niknam is rating a CCI Purchase along with a $ 180 price target. This figure suggests an upside of 17% from current levels. (To watch Niknam’s history, click here) So, that’s Deutsche Bank’s view, let us now turn our attention to the rest of the Street: 3 Buy and 2 Hold CCI combine to be a Moderate Buy rating. If the average price target of $ 170.25 were met, the store could be up 11% upside down. (See CCI stock analysis on TipRanks) Sierra Wireless (SWIR) Based in British Columbia, Canada, Sierra Wireless designs and manufactures wireless equipment for an international customer base. The company’s products include machine-to-machine and mobile computing devices for use on wireless networks, as well as modems, routers, and gateways for wireless mobile broadband. Sierra holds over 550 unique patents. Sierra’s focus on machine-to-machine systems makes its hardware particularly valuable for IoT applications. The company offers 5G-capable routers and broadcast solutions for IoT networks, as well as the first 5G-enabled vehicle router on the market. Turning to the financial and stock issues, we see the company moving in two directions at once. Quarterly revenue has been falling this year, and Q3 came in at just $ 113 million – well down from the $ 144 million reported in Q2. Although the quarter down overall, the automotive business showed a 3.6% yoy increase. However, the company’s stock has been on an upward trajectory, with 49% earnings so far outperforming the S&P 500.Among the bulls is Colliers analyst Charles Anderson, who calls SWIR ” a 5G IoT drama. ” Anderson is rating the stock at Buy along with a $ 20 price target. This target indicates the extent of its confidence – it suggests a 40% upside down year. (To watch Anderson’s story, click here) Echoing his stance, Anderson writes, “We like this combination of management / Board upgrades (CEOs who led the transition into IDTI and LSCC joined ‘ r recent Board); transforming a business model toward higher profit recurring revenue; 5G product cycle exposure; and low-spirited valuation compared to peers and histories … “” Sierra is in the process of transforming itself from being a low-margin supplier of cellular connectivity hardware to a higher-edge supplier of full-stack cellular IoT (hardware / software) (service). This is a better business model and a more compelling offer for customers, “the analyst added. Overall, Sierra has an equal split among recent reviews, 2 Buy and 2 Holdings, making the analyst’s consensus rating a Moderate Buy. ( See SWIR stock analysis on TipRanks) To find good ideas for 5G stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all TipRanks.Disclaimer equity insights: The opinions expressed in this article are solely those of the analysts concerned.The content is intended for informational purposes only.It is very important to do your own analysis before making any investment.